Discounting effectiveness

Defense planners continually face decision problems in which timeliness as well as opportunity cost must be considered and carefully weighed to make intelligent choices. When the timing of delivered capabilities is important discounting only cost, and not effectiveness, leads to an inconsistency. This paper presents a remedy. After motivating the need to discount effectiveness by considering the temporal nature of a threat and the operational profiles of alternatives to counter it, we employ an economic utility function approach to model system effectiveness as a time series of marginal contributions to an overall measure of effectiveness. We then provide a method for discounting the marginal effectiveness series into a single measure and discuss the descriptive and prescriptive value of our approach.